TSX knocked down more than 1 percent as energy crumbles

Alastair Sharp

3 Min Read

TORONTO (Reuters) - A capitulation in heavyweight energy stocks pummeled Canada’s main stock index on Wednesday, pushing it down 1.1 percent as crude oil prices plumbed new depths after a shock rise in U.S. stockpiles.

The energy group sank 4.3 percent, knocking it to its lowest since August 2004, in line with a similar fall in the commodity after the U.S. inventories numbers reinforced concerns about a global supply glut. [O/R]

“There’s quite a bit of panic in the energy sector right now,” said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP Ltd.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 157.24 points, at 14,036.63. There were three decliners for every advancing stock.

Ten smaller operators gave up between 7 and 15 percent of their market value.

Zohny said that for investors with a three-to-five-year horizon, some names could be considered buying opportunities at these levels.

“There’s quite a bit of bad news priced into the sector and there could still be some short-term pain, but it’s definitely starting to look more attractive,” he said.

A slip in the influential financials group also contributed to the index’s slide, its eighth in 10 sessions.

The financials are being tested by a combination of factors, said Philip Petursson from the portfolio advisory group at Manulife Asset Management, including banks’ ties to commodities-related companies and the low interest-rate environment.

The group fell 0.7 percent, with Bank of Nova Scotia (BNS.TO) down 1.2 percent to C$59.88 and Toronto-Dominion Bank (TD.TO) giving up 0.7 percent to C$51.93.